People earn an income when they are hired by an employer to work at a job. Income is earned as a wage, a salary or a sales commission.
Let’s look at an example of each:
Andrew works as a waiter at the Pancake Hut. He earns a wage. A wage is a set amount of money per hour of work. Andrew’s wage is $12 per hour.
Ellie works as a scientist. She earns a salary. A salary is a set amount of money per year. Ellie’s salary is $50,000 per year. If she adds up all her paycheques this year, the total will equal $50,000.
Toby works as a real estate agent. He earns a sales commission. A sales commission is an amount of money based on part of a sale amount. Tony is helping a family sell their house. The family agrees to pay Tony 5% of the house’s sale price. Tony sells the house for $200,000. The family pays him $10,000, which is 5% of the $200,000 sale.
1. List three different ways an employer can pay you for working at a job.
2. What is the difference between a wage and a salary?
3. A________________ is income based on part of a sale amount.
4. What would Andrew have to do to earn more money at his job? What would Toby have to do?
5. Bonus Question: A wage, a salary and a sales commission are all ways to earn income at a job. What is another way to earn income?